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Things continue to evolve in the wrong direction for Deutsche Bank in recent months. After being hit with large files several times in a row, there have been questions regarding the liquidity of this bank. Moody’s has issued a new warning about Deutsche Bank, stating how the institution is getting near its “default point.” That may be the last thing investors of the bank want to hear right now.
To put the news into perspective, Moody’s published a thorough report on their findings. Assuming the current trend at Deutsche Bank continues, they will face a default in the not-so-distant future. Despite efforts by DB to improve its capital position, things are looking very bleak right now.
Moody’s also mentions an Expected Default Frequency, which translates to a firm’s default risk. For Deutsche Bank, their systemic risk factor has increased and declined all year long. A volatile EDF is not good by any means, though, as it seems to correlate with the institution’s financial problems. Moreover, the bank’s EDF measure is well above optimal margins maintained by global banks. Anything above 1.22% deserves a thorough audit, and Deutsche Bank sits at 1.39% right now.
Moody’s Sees Big Problems Ahead For
Read more ... source: NewsBTC USA
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